Problems in Fintech Design

Inadequate Data on Market Outcomes

Regulators and researchers lack granular data on pricing, defaults, and borrower outcomes in small-dollar markets.

inadequate-data-market-outcomes

Inadequate Disclosure in Digital Channels

Mobile and online interfaces fail to clearly present key terms and total cost to subprime borrowers.

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Inadequate Investor Protection in Alternative Investments

Crowdfunding, P2P lending, real estate tokens, and other alternatives often lack robust safeguards.

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Inadequate Investor Redress and Compensation Schemes

Weak ombudsman systems and limited compensation funds leave retail investors exposed.

inadequate-investor-redress-compensation

Inadequate Portability of Retirement Savings

Job changes or migration lead to fragmentation and leakage of retirement savings.

inadequate-portability-retirement-savings

Inadequate Protection Against Currency and FX Risk

Borrowers exposed to FX-denominated loans or cross-border digital credit bear risks they cannot evaluate.

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Inadequate Protection for Instant Push Payments

Faster payments shift risk to users with limited recourse for misdirected or fraudulent transfers.

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Inadequate Suitability and Risk Profiling

Risk assessments are superficial, leading to portfolios misaligned with investors' capacity and goals.

inadequate-suitability-risk-profiling

Inadequate Support for Humanitarian and Crisis Payments

Existing rails struggle to deliver rapid, secure, inclusive payments in crisis settings.

inadequate-support-humanitarian-payments

Inadequate Support for Micro and Small Business Banking

Micro and small enterprises face high fees, manual processes, and poor integration with tools.

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Information Asymmetry on Borrower Risk

Lenders lack reliable data to assess risk of subprime borrowers, increasing prices or leading to exclusion.

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Information Overload and Biased Online Content

Retail investors face overwhelming, low-quality, or conflicted information online.

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Instability and Outages of Critical Payment Infrastructure

Frequent outages erode trust and push users back to cash or informal channels.

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Insufficient Alignment with Religious Views on Interest

Borrowers seeking to avoid interest-based lending lack accessible Sharia-compliant or ethically structured products.

insufficient-alignment-religious-views

Insufficient Climate and Disaster Risk Cover for the Poor

Low-income populations in climate-vulnerable regions lack accessible catastrophe and weather insurance.

insufficient-climate-disaster-cover-poor

Insufficient Financial Literacy and Numeracy

Borrowers struggle to understand compounding, fees, and consequences of small-dollar loans.

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Insufficient Integration of Savings, Credit, and Investment Journeys

Financial journeys are siloed, making it hard for users to graduate from saver to investor safely.

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Insufficient Integration of Social Protection and Credit

Lack of coordination between social transfer programs and emergency credit amplifies shocks for low-income borrowers.

insufficient-integration-social-protection

Insufficient Local Currency Investment Options

Investors in emerging markets face FX risk or limited domestic instruments for safe long-term saving.

insufficient-local-currency-options

Insufficient Oversight of Lead Generators and Brokers

Lead generators sell borrower data or route borrowers to the highest-paying lender, not the best product.

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Insufficient Protection for MSME Assets and Business Interruption

Micro and small enterprises remain uninsured against theft, disaster, and shutdown shocks.

insufficient-msme-asset-biz-cover

Insufficient Protection of Depositor Data

Weak privacy controls expose users to misuse of sensitive financial data.

insufficient-protection-depositor-data

Insufficient Protections Against Authorized Push Payment Fraud

Victims of social engineering and APP fraud struggle to obtain refunds or remedies.

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Insufficient Protections for Joint or Co-Signers

Co-signers and guarantors assume large risks without clear disclosure or recourse.

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